High Liner Foods reported an 11.5% increase in 2016 net earnings on February 22. The positive result was achieved despite a 2.5% decrease in receipts due to reduced sales of frozen breaded and battered seafood and disposition of the company’s New Bedford, Massachusetts-based scallop operation in the third quarter of 2016.
“The improvement in net earnings reflects the impact of lower raw material prices and incremental supply chain optimization savings, along with lower finance costs as a result of using strong free cash flow in 2016 to lower debt levels,” said Keith Decker, president and ceo of the Lunenburg, Nova Scotia, Canada-headquartered company.
High Liner posted a sales decrease of $45.5 million, or 4.5%, to $956.0 million compared to $1,001.5 million in turnover generated in 2015. Gross profit for the year increased by $1.2 million, or 0.6%, to $202.8 million compared to $201.6 million the previous year.
Volume slipped by 2.5% to 277.3 million pounds during the 52-week period that ended on December 31. Approximately 0.6 million pounds, valued at $8 million, was attributed to the scallop business sale last September.
During the fourth quarter sales fell by $14.9 million, or 6.6%, to $210 million compared to $224.9 million in Q4 2015. Gross profit declined by $1.2 million, or 2.6%, to $44.9 million. Adjusted net income decreased by $0.5 million, or 6.2%, to $7.6 million.
“We expect the trend of lower demand for frozen breaded and battered seafood products will continue into 2017, and that we will not return to volume growth until our new product sales can offset the decline that the traditional breaded and battered category is experiencing,” said Decker.
Innovation activities and new product offerings focused on bringing additional customers to the frozen seafood category are high on High Liner’s priority list this year. The plan is to roll out products that better align with emerging consumer trends and preferences.
“After completing our supply chain optimization project and improving our debt-to-Adjusted EBITDA ratio in 2016, we are well positioned for product innovation and further acquisition opportunities to support sales and earnings growth and further species diversification,” said Decker.
About the Company
High Liner Foods ranks as the leading North American processor and marketer of value-added frozen seafood. Its retail branded products are sold throughout the United States, Canada and Mexico under the High Liner, Fisher Boy, Mirabel, Sea Cuisine and C. Wirthy labels, and are available in most grocery and club stores. The company also sells branded products to restaurants and institutions under the High Liner, Icelandic Seafood and FPI labels and is a major supplier of private label value-added seafood products to North American food retailers and foodservice distributors.
